Contemporary Amperex Technology: Recent investor meeting feedback

CATL was the most discussed stock under UBS coverage during the past month. Fundamentally, the ESS slowdown and the shift from CATL ("deCATLization") remain the main concerns, while market dynamics may have added to the share price weakness. While some investors agree that the recent pullback appears overdone, there were questions concerning near-term catalysts. In this note UBS summarises the key debates and reiterates its bullish view on the stock. Regarding ESS, even if the installation slowdown occurs, it should be short-term in nature, as energy cost inflation this year has improved solar/wind + ESS economics versus last year. On deCATLization, Li Auto recently flagged its intention with the Sunwanda JV, and other examples include GAC Aion, Nio Onvo and Geely Zeekr. However, after recent newsflow regarding EV quality issues, UBS believes consumers will emphasise quality and that the use of CATL batteries could help EV makers strengthen consumer confidence. On catalysts: the compan